Firms Following an Unrelated Diversification Strategy Can Reduce Their Overall

question 34

Multiple Choice

Firms following an unrelated diversification strategy can reduce their overall risk when:

• A)resources are allocated among many businesses with different risk profiles
• B)they limit their growth by acquiring only successful companies
• C)synergies are developed among the business units
• D)management refuses to purchase businesses outside their sphere of expertise or knowledge

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Definitions:

Learning Effectiveness

The measure of how efficiently an educational process enables learners to achieve intended learning outcomes.

Pygmalion Effect

The phenomenon where higher expectations from leaders or teachers lead to an increase in performance among employees or students.

Gross Profitability

A financial metric indicating the revenue left after deducting the cost of goods sold, relative to sales.

Net Sales

The total revenue generated from goods and services, minus returns, allowances, and discounts.